چکیده انگلیسی

On the basis of a newly constructed dataset, this paper presents long-term series of the price levels, nominal wages, and real wages in Spanish Latin America – more specifically in Mexico, Peru, Bolivia, Colombia, Chile, and Argentina – between ca. 1530 and ca. 1820. It synthesizes the work of scholars who have collected and published data on individual cities and periods, and presents comparable indices of real wages and prices in the colonial period that give a reasonable guide to trends in the long run. We show that nominal wages and prices were on average much higher than in Western Europe or in Asia, a reflection of the low value of silver that must have had consequences for competitiveness of the Latin American economies. Labour scarcity was the second salient feature of Spanish Latin America and resulted in real wages much above subsistence and in some cases (Mexico, Bolivia, Argentina) comparable to levels in Northwestern Europe. For Mexico, this was caused by the dramatic decline of the population after the Conquest. For Bolivia, the driving force was the boom in silver mining in Potosi that created a huge demand for labour. In the case of Argentina, low population density was a pre-colonial feature. Perhaps due to a different pattern of depopulation, the real wages of other regions (Peru, Colombia and Chile) were much lower, and only increased above subsistence during the first half of the 18th century. These results are consistent with independent evidence on biological standards of living and with estimates of GDP per capita at the beginning of the 19th century.

مقدمه انگلیسی

This paper presents series of long-term evolution of price levels, nominal wages, and real wages in Spanish Latin America – more specifically in Mexico, Peru, Bolivia, Chile, Colombia, and Argentina – between ca. 1530 and ca. 1820. These new series allow us to compare price and wage developments in Spanish Latin America with those in Europe in the early modern period. One of the key questions is the relative standard of living of the Latin American population in the centuries before the 19th century ‘Great Divergence’. The sources used provide useful, although imperfect, information to assess the state of colonial Latin American living standards. To make our results comparable with those of the rest of the world, we have used the methodology developed by Allen (2001) and Allen et al. (2011) to estimate standardized real wages expressed as ‘welfare ratios’. These welfare ratios measure the purchasing power of nominal wages in terms of a standardized basket of consumption goods, necessary for subsistence (known as the ‘bare-bones basket’). The value of this basket is then compared with a similar basket in Western Europe while the real wage is expressed as the number of bare-bones baskets a family of four could afford with the wage of an unskilled labourer. Using this standard methodology enables us to link developments in wages and prices in Latin America with those of the rest of the world.
We focus on the long-term changes in the levels of prices and wages between the Conquest in the 1520s and 1530s and Independence in the 1810s and 1820s. Measuring real wages (as ‘welfare ratios’) for Latin America is the aim of this paper, but this also allows us to answer a number of related questions. How expensive was life in the Viceroyalties of New Spain and Peru in these three centuries? How did real wages react to the severe decline of the population during the 16th and early 17th centuries and to the partial recovery during the 18th century? Did real wages reflect these changes in the relative scarcity of labour, or did various forms of labour coercion keep them at an artificially low level? And how did real wages in Spanish Latin America compare with those in Western Europe?
We confirm the fact that living in colonial Latin America was costly. Prices were high throughout the region when compared to Europe. However, nominal wages were also high. As the region was the world's most important producer of silver, and wages and prices were measured in terms of that commodity, this result is not surprising; silver was relatively cheap there. This effect was stronger for the Potosi region; seat of one the main silver mines in the Americas.
Our main findings are that real wages in Mexico (and probably elsewhere) reacted to the sharp decline of the population after the Conquest in a way rather similar to patterns found in Western Europe (for example England and Tuscany) after the Black Death of 1348. That is, real wages escalated in the very long run and reached levels well-above subsistence until the 18th century. It was then that population recovery started driving real wages down to subsistence levels in Mexico around 1800. The real wages upward trend was rather slow compared with Western Europe. The real wages were initially low due to the early stages of development of the labour market and the forms of labour coercion established by the Spaniards. In the Andes region (Peru, Colombia, and Chile) we do not find equally high real wages, and the rise above subsistence occurs later in the period suggesting continued labour scarcity during 18th century. In Potosi (Bolivia), the main silver mining centre in South America, wages were high, in particular for free labourers. However, a sizable share of the labour force was drafted from distant provinces. Finally, for the end of our period, the real wages for Argentina show a very high but declining welfare ratio. Our results are by and large consistent with biological standards of living studies and confirmed by tentative estimates of GDP per capita at the beginning of the nineteenth century. However, our data are in disagreement with Maddison's (2001) earlier GDP estimations for the 1500–1800 period, suggesting we should reconsider the overall economic growth experience of early colonial Latin America.

نتیجه گیری انگلیسی

This paper was made possible by the diligent work of dozens of economic historians who over the last 50 years or so have collected a wealth of information on the development of prices and wages in the various parts of Spanish Latin America between the Conquest and the Independence. Our contribution has been to integrate these data into one coherent framework. Following a consistent methodology, this format allows for international comparison, in particular with Western Europe, but in principle also with the rest of the world. We have reconstructed the long-term evolution of the price levels measured as the costs of a bare-bones budget of a family and the nominal and the real wages of construction workers, miners and other ‘unskilled’ labourers in Mexico, Peru, Bolivia, Chile, Colombia, and Argentina.
Our main findings are that Latin American price experience was far from unique in historical perspective. The long-term evolution of prices was similar to the one experienced in Western Europe. The long 16th century (until the 1620s) witnessed a very strong increase in the price levels. This was followed by stability and in a few regions even decline during the second half of the 17th century. In the 18th century a renewed but much more modest rise in prices began. Despite the overall similarities in trends, we discover significant differences in absolute price levels within Latin America: prices in Mexico, Argentina, and Colombia were much lower than in Peru, Chile, and Bolivia. While silver flows could be the most obvious cause to explain these differences systematically, we find that the shift of importance of the silver production within colonial times did not affect the overall pattern. While silver flowed copiously from the Bolivian mines in Potosi, the commodities in the region were more expensive. However, when silver mining became more prominent in Mexico in the 17th and especially the 18th century, we observe no change in the relative price levels. Only towards the very end of the colonial period do we observe convergence in price levels within the region as a whole.
We were, however, primarily interested in the development of nominal and real wages as indicators of the standard of living of the population and of the productivity of labour. The wage data suggest that in the long-term, wages responded to market conditions. In particular, we find wages in Mexico reacted to changes in the supply of labour due to the dramatic decline of the Indian population in the century after Conquest, and the partial recovery during the 18th century. However, in the 16th century this response is probably delayed by coercive institutions. In mining centres of Bolivia and Chile, wages are also affected by changes in the demand for labour due to booms and busts. While labour scarcity was common throughout the Spanish empire in the Americas, the degree and causes varied by location. Common to all was the depopulation after Spanish contact; the mining boom in Bolivia and very high land/labour ratio in Argentina also positively affected real wages there. The real wage estimates presented here suggest that living standards may have increased substantially, a change that is quite clear for Mexico, for which we have the longest series and the best data. But the standards of living of free wage labourers in Potosi, of construction workers in 18th century Buenos Aires, and, to a much lesser extent, of Chilean miners in the same period, were also relatively high, and compared favourably with real wages of large parts of Western Europe. Real wages in Peru and Colombia, on the other hand, were not particularly high before the 1720s suggesting a distinct demographic development in the region.
These results provide important insights into the nature of the Latin American economy in this period. This was not a ‘feudal’ economy dominated by non-market institutions. The results clearly indicate that markets affected prices and wages. In particular, relative scarcity, most clearly of labour, clearly influenced the outcomes of market exchange. This does not imply that non-market institutions such as the mita and the encomienda for drafting labour were unimportant. However, Spanish authorities realized that coercion alone could not meet the labour demand: monetary incentives were almost always part of the labour relationship, which were often adjusted to prevailing markets conditions.
These findings also have consequences for our view on the long-term economic growth of Latin America in this period and in the 19th century. They strongly suggest GDP per capita has developed differently than estimated by Maddison (2001) in his pioneering research, and that the starting level at the eve of the 19th century may have been higher than assumed so far.